A state law that took effect in early September has lead to a dramatic fall in foreclosure starts in Orange County and statewide, according to data compiled by ForeclosureRadar.com at Mortgage Insider’s request.
Before the bill became law on Sept. 8, banks typically filed 100 to 150 notices of default each day in the county, said Sean O’Toole, president. He said on the Friday before the law was enacted banks filed 162 NODs, and the following Monday, the first day of the new regulation, banks filed just 18 NODs.
NOD filings fell even further, languishing in the single digits in the days that followed. Lately they have increased slightly. For example there were 32 NODs filed on Sept. 17, O’Toole said.
Lenders usually file an NOD after a borrower has missed three or more monthly payments. NODs are the first stage of foreclosure.
Senate bill SB 1137, which Gov. Schwarzenegger signed on July 8 but the foreclosure provision was enacted 60 days later, states lenders and loan servicers must contact a homeowner at least 30 days before filing an NOD and explain their options to avoid foreclosure.
The bill only covers loans made during the final years of the housing boom.
O’Toole said the communication provision will slow NOD filings as banks adapt to the law. But he doesn’t expect a decrease in the total number of NODs or actual foreclosures over the long term.
“This is largely a paperwork issue,” O’Toole said.
He says if borrowers are upside down on their mortgages, they will still walk away. Nothing in the bill changes the fundamentals of the housing market, he said.
O’Toole said there could be a modest decline in actual foreclosures in coming months, but that would only delay the housing recovery, he said.
Whether he is right or not, the data suggests the same trend is occurring statewide.
California had been ranging 1,500 to 3,000 NODs daily, with 2,885 on Sept. 5. But three days later when the law went into effect banks filed just 164 NODs.
“It really fell of a cliff,” O’Toole said. “It’s a temporary impact.”
He said the statewide totals have climbed a bit up to a range of 400 to 500 daily.
And in related foreclosure topics…
- Huntington Beach’s housing market still slipping, agent says
- State bill slowing foreclosures, agent says
- Pimco’s Gross: Taxpayers can gain from $700 billion rescue
- O.C.’s foreclosure threat grows
- Banks discount O.C. homes 30% at foreclosure auctions
- How O.C. property flippers cost WaMu millions
- Distressed homes 43% of O.C. listings
- O.C. folks pay credit cards, skip mortgage payments
- O.C.’s growing foreclosure backlog
- Banks seize record number of O.C. homes
The sixty day stall is on. What’s an extra two months rent free when the borrower is going to lose the property anyway?
The other factor that will slow, not end, NOD’s being filed is the bank failures and the bailout bill as all the bad loans will be bounced around for awhile until they land at their final “resting place” for disposition
Lou pacific
Real Estate and Mortgage Company Consulting
Serving OC for 30 Years
delaying the inevitable
This is a stupid bill. Most of these people who knew full well they couldn’t afford the house they were getting into are now scamming to stay in that house for free as long as possible. All this does is give them an extra month of rent-free living.
I read a cool artical the other day on the top ways that the average person is “brain washed” in the the modern area.
Close to the top is misleading headlines.
Generally people only see the headlines and do not investigate or read closer. The headline is all that subconciously sinks in and easily manipulates the average reader to internalize a message often quite contrary to the underlying truth..
This newspaper is notorious for misleading headlines and I am curious to know more about what the actual agenda for this misinformation and manipulation is.
Don’t worry Guys, President Palin will come in and fix everything !!
Don’ t worry guys President Obama with all 147 days of experience as a Senator will solve all the ills of the US. He has been selected President by the mainstream media already. As has been noted, there is almost no negative news about the annointed one. And almost nothing but negative news about McCain.
Don’t forget this is the same thing that happened when Bush beat Gore.
Gore who was ahead in almost all the polls right before the election. And expect Obama to be ahead in the polls also.
McCain is a joke and if you think that old loose canon will do anything to ease the everyman’s financial crisis, you should put down the bottle. I’m 100% sure of this after watching his lacking performance in last week’s debate. Weak, to put it mildly.
the little dutch boy is doing great work!! move along now nothing to see here!
mccain obama = dumb and dumber
ron paul was the only candidate with an
understanding of our nations real problem-
an over sized out of control meddling
government
gotta love the obamabots on here… hilarity
Go ahead and criticize Obama, bps. I’d rather have an intellectual in charge than some hot head whose ticker may be about to run out.
“and if you think that old loose canon”
Joe Biden is the loose CANNON .. you want someone that unpredictable and unstable holding Obama’s hand while he learns on the job? scary thought
Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton’s secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.
Caseclosed,
The intention was for equal homeownership rights for everyone with the same means of paying it back without discriminating based on race. In fact, the rules for the CRA strongly oppose loaning to individuals without proper background checks. Don’t blame the poor. It is because of massive speculators. People took advantage of the system. AS ALWAYS
From wiki:
there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust.”[18] Center for American Progress fellow Robert Gordon[19] noted that approximately half of the subprime loans were made by independent mortgage companies that were not regulated by the CRA and thus had no government obligation to offer credit to minorities. In the later part of the crisis, these mortgage companies made subprime loans at twice the rate of CRA banks. Another third of the major subprime lenders were regulated but had very little CRA involvement.[20] Gordon also makes the argument that the weakening of the CRA in 2004 was followed by intensified subprime lending.[20]
How many independent mortgage companies popped up over the last 5 years? 100’s
Typical Specuspeak from the “tool” O’toole.
Obama’s meltdown role explained:
http://www.lewrockwell.com/dilorenzo/dilorenzo125.html
There is fixed amount of real estate. Any marginal change at the low end will affect the entire market.
Measured across races, equal rates of default would indicate that lenders were properly anticipating risk. However, this is not the case. Blacks are defaulting at a higher rate thus indicating that lenders did not correctly assess risk. Legislation forced them to lend based on race. The media hysteria on the subject during the Clinton years was typical left wing miss interpretation of statistics for advancement of socialist agendas.
The total value of ‘bad mortgages’ is far less than 100 Billion. Do the math boys and girls and get off the Democrat bad Republican good or vice versa brainwashing.
Karl Marx was an intellectual. Actually every flawed and failed social policy and scheme that has wrecked economies, bankrupted nations, and sold billions into slavery has been started by intellectuals.
Brainy idiots, I don’t trust them. They live in ivory tower educational establishments that neither change nor vary with prevailing economic winds. Nothing they do can influence their own living conditions. Perhaps that’s what drives them to attempt to influence our lives.
I don’t think Obama is an awful guy, but I do think he’s just a front-man for the leftist point of view.
Nature is balance. Each element of it requires balance for every other element to survive. Economics is a natural force, and impossible to fully control because of that. You can’t legislate the economy to be what you want it to be. You can only create an encouraging climate and provide necessary regulations to prevent theft(in all its forms) and danger to the public. But property rights are the cornerstone of any solid and healthy economy. Mess with those and the whole house of cards collapses.
THE REALITY OF THE ABOVE COMMENT IS FACT YET VERY LITTLE ATTENTION AS FARR AS I KNOW HAS BEEN GIVEN TO THE IMPORTANCE OF PROPERTY RIGHTS .THE SWEAT AND BLOOD OF THIS NATION,THE DIGNITY AND SANITY OF PEOPLE WHO HAVE INVESTED THE FUTURE AND DREAMS (MANY FOR YEARS WITHOUT FAIL)IN THIS LAND ,THIS TANGIBLE PIECE OF HOPE SUCCESS,SAFETY AND PROMISE. HAVE BEEN ALLOWED TO BE TREATED LIKE A HOOKER,INVADED CHEATED OF PAY AND LEFT OUT ON THE STREET BY HEARTLESS PIMPS IN PRIESTS ROBES WITH GREED SO DEEP AND DECEPTION SO FIERCE THEY USE THE FEDS AND THE CIVIL S OWN LAW TO STEEL THE HOOKERS LAST MEAL AND NOT EVEN PAY TAXES ON MILLIONS AND BILLIONS ….and not even re investing the money in your community,OR your country , …. we most stop the pimps,the systematic frauds,and cover up.Behind the orange blinds, FROM THE FOSTERING FRONT LINES OF FORECLOSED MINDS…